Broadcast Television in Latin
America

Television signals are electromagnetic waves that are sent
from a transmitter to one or more television receivers. Since television sets are produced
at factories by different manufacturers in order to receive signals coming from different
broadcasters, there has to be a television standard. All electromagnetic waves travel at
the speed of light, but they can have different wavelengths and frequencies. Television
signals have been assigned by international accord to certain ranges of the
electromagnetic frequency spectrum.

First of all, there is the VHF (Very High Frequency) band
of frequencies. There are twelve VHF channels, which are numbered 2 through 13
respectively, and they occupy the frequency range between 54 MHz and 216 MHz (where MHz
means mega-Hertz or millions of cycles per second). Each channel is 6 MHz wide, with 4 MHz
used for transmission of video images and 2 MHz for audio and other data.

With the exception of Channels 4 and 5, and Channels 6 and
7, the VHF channels are adjacent to each other. Adjacent channels interfere with each
other through signal leakage, and so adjacent channels are not assigned in the same city.
This means that the maximum number of VHF stations is seven in any city. At the same
transmission power, a lower numbered channel can reach a larger area than a higher
numbered channel.

To increase the number of television stations in a market,
the UHF (Ultra High Frequency) band was introduced. There are 56 UHF channels, which are
numbered 14 through 70, in the range of 470 to 806 MHz. The channels are 6 MHz wide with
no unused gaps in between. Due to interference, adjacent channels are not assigned in the
same city. In theory, there can be as many as 28 UHF television channels per market. In
practice, there are seldom more than three or four UHF stations in even the largest
cities. At the same transmission power, the high-frequency UHF stations reach a much
smaller area than the low-frequency VHF and they are therefore less economical to operate.

The above description provides the theoretical capacity for
the number of broadcast television channels that can be received. In practice, there are
some constraints. For example, Buenos Aires, Argentina is situated across the river from
Montevideo, Uruguay. Frequencies in one city will interfere with those of the other. This
explains why the allocations are channels 2, 7, 9, 11 and 13 in Buenos Aires and channels
4, 5, 8 and 10 in Montevideo to minimize interference.

In the graph below, we show the actual number of national
broadcast television channels received by Latin Americans, according to the Los
Medios y Mercados de Latinoamérica 1998 study.

(source: Los Medios y Mercados de Latinoamérica 1998)

The average number of national broadcast television
channels that can be received by Latin American households is 5.29 channels.

Perhaps the more important issue is not so much the number
of channels that can be received, but the actual number of channels that are being
regularly watched. In the following graph, we show the actual number of national broadcast
television channels watched by Latin Americans during the week.

(source: Los Medios y Mercados de Latinoamérica 1998)

In a typical week, the average person between the age of 12
and 64 inclusive watches 3.36 national broadcast television channels. This means that
Latin Americans will watch only 100 x 3.36 / 5.29 = 64% of what they can receive. The
following table show the cross-tabulation between the number of channels that can be
received and viewed in the last 7 days (each row adds up to 100%, within rounding).

Number of Channels Viewed Last 7
Days

Number of
Channels
Received

Zero

One

Two

Three

Four

Five

Six

Seven

Eight

Nine

One

10%

90%

Two

1%

27%

72%

Three

4%

18%

30%

48%

Four

2%

9%

22%

28%

38%

Five

2%

8%

17%

21%

26%

26%

Six

1%

6%

14%

23%

16%

17%

23%

Seven

1%

4%

16%

18%

21%

13%

14%

14%

Eight

0%

5%

10%

17%

16%

19%

13%

11%

10%

Nine

2%

3%

8%

24%

15%

11%

16%

6%

10%

4%

Total

7%

9%

17%

22%

18%

13%

8%

4%

2%

0%

The fact of the matter is that not all television channels
are equal. These differences arise due to a number of factors ---

Due to a set of path-dependent historical developments,
some stations with long histories have developed viewer loyalty and dominance whereas the
newly licensed stations have yet to develop brand identities

When there are many broadcast television channels in a
market, it may be necessary to have product differentiation. The typical broadcast
television channel offers a programming schedule of telenovela reruns in the
middle of the day, cartoons in the early afternoon, first-run telenovelas in the early
evening, news in the late evening, cartoons on weekend mornings and sports on weekend
afternoons. But when there are nine broadcast television channels in a market, it makes no
sense for all of them to run the same types of schedule, because counterprogramming is
more productive and profitable, especially for the lesser players. Sometimes, this works
as just juggling around programs. Other times, the entire channel is positioned as a niche
product (e.g. Rock y Pop in Santiago, Chile; Puma TV in Caracas,
Venezuela; TV Cultura and TV Educativa in Brazil; Canal 11 and Canal
22 in Mexico City, Mexico).

Signals come at different strengths, wherein we have
noted that the quality of the signals depends on the positioning in the spectrum.
Obviously, viewers prefer to have clear pictures.

There are differences in the sizes, positions and shapes
of the coverage areas, wherein the reach of national broadcast channels depend on the
number of retransmitters, satellite coverage and cable carriage.

The television channels are in different financial
conditions, wherein television channels with good financial backing can afford to invest
in production, distribution, promotion and sales, and to reap the benefits.

The competitive environment is a function of both the
size of the market as well as the current macroeconomic conditions. To put it simply, a
small market may be able to profitably support a couple of television channels. The
smaller television channels will probably be caught in a path-dependent downward spiral
--- small audiences mean less revenues, which mean poorer programming either produced by
themselves or purchased from the outside, which mean even smaller audiences.

Whilst it is desirable to offer consumers more viewing
choices, the matter is not simply one of opening up the television spectrum to more
competitors. It is also necessary to create suitable environmental conditions to permit
the television channels to survive and flourish. Now that is a much more difficult
proposition.